CapitaLand Retail China Trust NPI up 9.7% to $35.95m in Q3

The acquisition of CapitaMall Xinnan lifted revenue up.

CapitaLand Retail China Trust's (CRCT) net property income (NPI) rose by 9.7% YoY from $32.77m to $35.95m in Q3.

According to its financial statement, distributable income grew by 4.2% YoY to $21.41m, whilst distribution per unit (DPU) was lifted 0.4% YoY to 2.37 cents.

Gross revenue rose by 10.6% YoY to $5.4m due to the contribution from CapitaMall Xinnan which was acquired on 30 September 2016 and rental growth from CRCT's multi-tenanted malls.

The acquisition of CapitaMall Xinnan also lifted property expenses by 12.3% and management fees by 13.1%.

However, CapitaMall Qibao also faced competition, resulting in lower revenue, whilst CapitaMall Anzhen had no contributions.

Here's more from OCBC Investment Research:

Going forward, we expect greater contributions from CapitaMall Wangjing from 2Q18 onwards as the proportion of non-anchor NLA increases from 50% to 60%.

On another note, contributions from CapitaMall Minzhongleyuan have been fairly volatile as it continues to undergo trade mix adjustments – with the asset clocking NPI of CNY1.0m in 1Q17, CNY2.5m in 2Q17, and CNY0.3m in 3Q17.

Whilst the asset is relatively small, we had initially expected a more robust gain in contributions post the opening of the Zhongshan Avenue. We believe that these adjustments may take longer than we initially expected and make changes to our assumptions accordingly.